GM’s plan to restructure Opel is not very convincing, sources say

According to an internal ministry review in Germany, General Motors Co.'s plan to restructure Opel is not very convincing, Spiegel magazine reported last Friday.

Last Tuesday, Opel CEO Nick Reilly introduced a restructuring plan, under which 11 billion euros ($15 billion) will be invested by 2014 and 8,300 jobs will be cut in the carmaker's attempt to break even by 2011 and make a profit the next year.

Spiegel said that the ministry review questions its viability and sees the risk of state aid for Opel unjustifiably ending up with parent company GM in the US in the form of license charges.

GM is seeking 2.7 billion euros in state aid from countries hosting plants (Britain, Germany, Poland and Spain) to help finance the 3.3 billion Opel revamp. Opel is asking Germany for 1.5 billion euros in state aid to fund 4,000 job cuts in its home country.

Opel is asking for 1.2 billion euros from Spain, the UK, Austria and Poland. Last week, German Economy Minister Rainer Bruederle said that it will have to examine the documents carefully.

It can be recalled that Bruederle has been calling on GM to fund its subsidiary's operations itself, and not just contribute 600 million euros. [via autonews]